How to Consolidate Debt

Drowning in debt? There are solutions.

If you are looking for a way to manage your debt more effectively with lower repayments, lower interest rates, or a shorter term loan, debt consolidation may be the right choice for you.

In this article, we’ll discuss how to consolidate debt in a way the benefits you now – and in the future. Let’s get started.

What is debt consolidation?

Debt consolidation is the process of rolling all of your current debts into one single loan. People use a debt consolidation loan to achieve a variety of financial goals, such as increasing cash flow or paying off debt faster.

For the most part, this debt management strategy can be incredibly beneficial, especially if you are dealing with high-interest debt, such as credit card debt. It’s essential, however, to remember that some debt consolidation loans can make your situation worse. For example, if your new loan has a higher interest rate than your existing debts.

How to consolidate debt in three steps

Here’s our three-step guide to consolidating your debt. Follow this to determine which – if any – debt consolidation solution is right for you.

Step 1: Get a clear picture of all existing debt

Managing your debt effectively starts with gaining a clear picture of your existing debts. You’ll want to uncover the following information about each of your debts:

  • How much do you currently owe?
  • What interest rate are you paying?
  • What are the monthly repayments?
  • Are there any break fees? If so, how much do they cost?

Step 2: Determine how much can you afford to pay each month

Now, it’s time to work out just how much you can realistically afford to put toward your debt each month. This may be less or more than you are currently paying – either way, be honest with yourself.

You can use this information – as well as any other financial goals – to decide what you’d like to achieve from consolidating your debt.

If you can afford more than you are currently allocating to debt repayments, your aim may be to rid yourself of debt sooner. If you are struggling to meet your repayments, your aim will more likely be to reduce repayments with either a lower interest rate or longer-term loan.

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Step 3: Explore debt consolidation loans

At this point, you should have a solid understanding of how much you owe, how much you can put toward your debt repayments each month, and what you hope to achieve by consolidating your debt. It’s time to explore debt consolidation loans.

A personal loan is a great option to consolidate debt for many individuals. Personal loans have fixed terms, meaning that repayments are calculated to ensure that all outstanding debt is cleared at the end of the loan period.

Opting for one, easy-to-manage personal loan may deliver the following benefits:

  • Lower interest rates
  • Fewer fees
  • Streamlined banking experience

Consolidate your debt today

Now that you know how to consolidate debt explore how our personal loans can help you achieve financial freedom. You can even apply online today – we promise it only takes a few minutes!

Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.


Ordered by the Federal Court of Australia

The Federal Court of Australia has found that Cigno Australia Pty Ltd (Cigno Australia) and BSF Solutions Pty Ltd (BSF Solutions) have breached the law by engaging in unlicensed credit activity and charging prohibited fees.

In the period from July 2022 to 3 October 2023, over 100,000 consumers have been lent a total of $34 million, and charged fees of over $70 million, under the ‘No Upfront Charge Loan Model’ operated by BSF Solutions and Cigno Australia. At no time has either BSF Solutions or Cigno Australia held an Australian Credit Licence.

The Court also found that Mark Swanepoel (director of Cigno Australia) and Brenton James Harrison (director of BSF Solutions) were involved in these breaches of the law.

With effect from 24 May 2024, the Court has granted permanent injunctions preventing Cigno Australia and BSF Solutions from:

  • demanding, receiving or accepting fees or charges, including amounts of loan principal, from consumers in relation to credit provided under the ‘No Upfront Charge Model’; and
  • engaging in further credit activity pursuant to the ‘No Upfront Charge Loan Model’, including by entering into new agreements with consumers, for so long as they do not hold an Australian Credit Licence.

Cigno Australia was ordered by the Court to, by 5th July 2024, send written communications to consumers who between July 2022 and December 2022 entered into agreements with Cigno Australia and BSF Solutions under the ‘No Upfront Charge Loan Model’.

The Court will later determine whether (among other things) Cigno Australia and Mark Swanepoel ought to pay a pecuniary penalty in respect of this conduct, and whether Mark Swanepoel should be restrained from carrying on a business engaging in credit activity.

Cigno Australia, BSF Solutions, Mr Swanepoel and Mr Harrison intend to appeal the decision of the Court and have filed an application for leave to appeal. If the appeal is successful, some or all of the orders of the Federal Court of Australia may be set aside.

Where can you get more information?

Where to go for further support

You can access legal advice in your state at: Free legal advice –

If you are experiencing trouble with debt, or money worries in general, contact:

  • the National Debt Helpline on 1800 007 007 or online chat (9:30am to 4.30pm, Monday to Friday).

If you need someone to talk to, contact:

  • Lifeline on 13 11 14 (24 hours) or their crisis support online chat or
  • Beyond Blue on 1300 22 46 36 (24 hours) or their webchat